07-04 Amazon

If you’ve never tried Marmite on your toast, tread carefully. With a consistency of axle grease and hints of toe jam, you will, as their slogan goes, either “love it or hate it”. My wife and I love it but I regularly bitch at the cost of the little jars which barely last us a week. Until I came home yesterday to find 3 huge tubs of Marmite that my wife purchased on Amazon. Beyond my delight was my surprise that she used Amazon at all. Let alone Amazon Prime. Now I understand where all those little empty boxes come from.
President Trump wants to build a wall around Amazon. I get the politics. Amazon is a frightening disruptor.
I was an early adaptor of e-commerce and was proudly selling rare Canadian stamps online bringing me about two thousand every month. It was a most rewarding hobby until EBay came along. Soon everyone and their brother were dusting off grandpa’s old stamp album and auctioning stamps off at ridiculously low prices. That ended that business. Sucks to be in retail.
Remember the angst Walmart generated when they moved their massive stores to the edges of lovely mid-sized communities? Within a year the local town hollowed out, except for the nail salons. Sucks to be in retail.
And those Dollar stores? An entirely new sector that is sweeping the planet, putting pressure on the convenience contenders who are now relegated to selling cigarettes and garbage food.
Back to Amazon. Some of us remember when they started out as an online bookstore but clearly Jeff Bezos had bigger plans and those that helped finance him stayed with him for over a decade as he grew and lost money every year. Today Amazon is the largest Internet retailer in the world and recently overtook Walmart as the most valuable retailer in the US.
And did you know that these guys are the world’s largest cloud computer providers! And don’t forget Mr. Bezos owns the Washington Post – also loathed by President Trump. The list of subsidiaries is enormous, including his privately funded Blue Origin space services company. Phew.
Most of us are used to these major players disrupting the status quo – especially in retail. We watch as our vaunted Department Stores close, our malls and local shops thin out leaving us to wonder why everyone isn’t unemployed, reading pulp fiction on our Kindle (from Amazon) while stuffing our faces with pastries from Whole Foods (from Amazon).
The fact is, Amazon is one of the largest employers in the US and growing globally like a weed. Plus Amazon needs stuff to sell. So instead of doing your own retailing (in shops or online) you do it through Amazon. My marmite didn’t come directly from an Amazon warehouse, it came from one of its partners.
So while we as consumers love Amazon, because of their vast offerings and brilliant operations, and as suppliers we line up to join their network, we sense deep down they are a serious disruptor. They are amassing frightening control. They are amassing unbelievable wealth.
Somewhere down the road our debt ridden governments, who can never pay off their ballooning debts, and our cash laden super players, who can never spend all their money, will probably clash. But that kind of potential disruption is for others to speculate.
Right now I’m focussed on recycling my wife’s empty boxes that I now know were from Amazon. Prime.